Skills mismatch, lack of economic diversification and deep-rooted societal beliefs cause unemployment says report

The report, ‘Addressing the Youth Unemployment Challenge in Bhutan through a Systemic Portfolio-Based Approach’ shows gaps within the employment system identified through extensive consultations with the youth and other stakeholders.

An official from the Ministry of Labour and Human Resources (MoLHR) pointed out that skills mismatch, lack of economic diversification, and deep-rooted societal beliefs and values are the three major systemic challenges causing youth unemployment in the country.

Some of the factors and pain points identified are the weakening social fabric through increasing divorce rates, preference for civil service employment, siloed approach of the agencies, social norms and stigma, passive role of youths, narrow social safety net and weak information flow.

Accordingly, the report presents a coordinated suite of interventions that are integrated and complement one another. The proposed interconnected interventions will impact different levers of change like policy reforms, institutional frameworks, and behavior change.

Meanwhile, Labour Minister Karma Dorji said, “The economically productive population of Bhutan is challenged by the demands of the emerging job market and economic landscapes. This has resulted in the increasing trend of unemployment, and in particular, youth unemployment.”

Lyonpo added that while the ministry is tasked to create enabling conditions to smooth out the labour market complexities, it is understood that a holistic approach is required to address these complexities.

Labour market issues cannot be resolved with siloed approaches targeting only particular points in the web of complexities, he said, adding that perhaps, this fact has undermined the current interventions of the ministry to regulate and facilitate the labour market effectively.

“The outbreak of COVID-19 pandemic has brought on new challenges to the labour market system. The issue of unemployment deteriorated, and the foreign workers who went back home due to the pandemic created a huge gap for the skills, which were not readily available in the local labour market,” Lyonpo said.

Therefore, he said that the report comes at the right time which will help devise innovative strategies to overcome the challenges of the labour market.

UNDP Resident Representative Azusa Kubota, said, “The report presents a mix of long-term and short-term interventions for systemic and transformational change. These solutions are critical for creating ‘enabling environments’ to harness the potential of young people. They will also help address the root causes of fixed mindsets on public sector jobs and the view of ‘state as the provider’ of services and solutions.”

She said UNDP stands committed to supporting efforts to translate this report into actions and transformational results, she further added.

Another key insight from the report is that the Bhutanese youth are driven by a strong aspiration to give back to the country. This challenges the commonly held views of youth as beneficiaries and calls for concerted efforts to actively engage youth in nation building.

The pandemic, with its disproportionate impact on young people, has exacerbated youth unemployment. According to the Labour Force Survey 2020, youth unemployment has doubled in one year from 11.9 percent in 2019 to 22.6 percent in 2020.

The strategic narrative that guided the report also places the youth at the center of efforts to unleash and harness their vast potential for an inclusive, innovative, and dynamic economy.

MoLHR and UNDP launched the report with technical support from UNDP’s Regional Innovation Centre, Bangkok Regional Hub.